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V3200-21 23 December 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Daycare center services may be exempt from VAT or taxed at 4%, 10%, or 21% depending on the provider and the contract

A foundation inquires about the VAT liability and the applicable rate for its daycare services for the elderly. The DGT determines that they may be exempt if the entity is of a social nature, or subject to 4%, 10%, or 21% depending on whether there is an administrative agreement or if the provider is a common entrepreneur.

The question raised

Question raised: VAT liability and, where applicable, exemption of the aforementioned daycare services.

The DGT's ruling

Daycare services are exempt if provided by a public law entity or a private establishment of a social nature. If no exemption applies, the 4% rate is applied to the services defined in Law 39/2006 provided through agreed places or administrative contracts with prices fixed by the Administration, or when financed by a financial benefit covering more than 10% of the price. In the remaining cases involving entrepreneurs or professionals, the 10% or 21% rate shall apply as appropriate.

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